Re Unilan Holdings Pty Ltd; Unilan Australia Pty Ltd and Hamilton Wool Processing Pty Ltd v the Honourable John Charles Kerin [1992] FCA 179; (1992) 14 Atpr 41-169 (1992) 107 ALR 709 (1 (29 April 1992)

FEDERAL COURT OF AUSTRALIA

Re: UNILAN HOLDINGS PTY LTD; UNILAN AUSTRALIA PTY LTD and HAMILTON WOOL
PROCESSING PTY LTD
And: THE HONOURABLE JOHN CHARLES KERIN
No. G591 of 1991
FED No. 211
Negligence - Trade Practices - Practice and Procedure
[1992] FCA 179; (1992) 14 ATPR 41-169
(1992) 107 ALR 709
(1992) 35 FCR 272

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Hill J.(1) $NCWDS Negligence - strike out application - whether Minister owed duty of care in making statement of future government policy - consideration of Meates v Attorney-General.

Trade Practices - section 52 - statement of government policy by Minister made at international wool conference - whether statement conduct in trade or commerce.

Practice and Procedure - strike out application - whether case arguable.

Trade Practices Act 1974 (Cth): ss.52, 82.

General Steel Industries Inc v Commissioner for Railways (nsw) [1964] HCA 69; (1964) 112 CLR 125

Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594

Glorie v WA Chip and Pulp Co Pty Ltd [1981] FCA 224; (1981) 55 FLR 310

San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [1986] HCA 68; (1986) 162 CLR 340

Durant v Greiner (1990) 21 NSWLR 119

Rowling v Takaro Properties Ltd [1987] UKPC 2; (1988) 1 AC 473

Commonwealth v Northern Land Council (1991) 30 FCR 1

Meates v Attorney-General (1983) NZLR 308

Anns v Merton London Borough Council [1977] UKHL 4; (1978) AC 728

HEARING

SYDNEY
29:4:1992

Counsel and Solicitors for Applicant: J. Hamilton QC with S. Walmsley

Instructed by: Blessington Judd

Counsel and Solicitors for Respont: D.M.J. Bennett QC with R. Webb

Instructed by: Australian Government Solicitor

DECISION

The applicants, Unilan Holdings Pty Ltd, Unilan Australia Pty Limited and Hamilton Wool Processing Pty Ltd, are Australian companies engaged in the international wool trade. They have commenced proceedings in this court against the Honourable Mr John Charles Kerin, who was at all material times the Minister for Primary Industries and Energy of the Commonwealth of Australia, alleging a breach by him of s.52(1) of the Trade Practices Act 1974 ("the Act") giving rise to a claim under s.82 of that Act. The applicants also seek damages in negligence.

2. Mr Kerin moves the court to strike out the statement of claim in the proceedings as disclosing no reasonable cause of action.

3. At the core of the case, as pleaded by the applicants, is a speech given by Mr Kerin in June 1990 to the annual conference of the International Wool Textile Organisation, the international body governing the wool trade, held at Dubrovnik, in what was then Yugoslavia. It is alleged that that conference was attended by representatives of bodies involved in the international wool trade including growers, exporters, spinners, weavers, topmakers, brokers, buyers' agents and representatives of the Australian Wool Corporation. It is said that Mr Kerin had requested that he be invited to attend and address the conference. His speech was subsequently distributed in written form.

4. The background of the speech is to be found in the Wool Marketing Act 1987; its denouement in the Amendment to that Act by the Wool Marketing (Temporary Provisions) Amendment Act 1991.

5. The scheme of the Wool Marketing Act is to be found summarised in the decision of the full court of this court in New South Wales Farmers' Association v Minister for Primary Industries and Energy (1990) 94 ALR 207. It suffices, therefore, to say that the Wool Marketing Act regulated the sale of wool in Australia. The Act provides for a reserve price scheme which is operated by the Australian Wool Corporation ("the Corporation"), a statutory body. The reserve price is to be determined by the Corporation and another body, known as the Wool Council, by agreement. If no agreement can be arrived at, the minimum market indicator reserve price is determined by the Minister for Primary Industries and Energy. The Corporation is obliged to bid that reserve price and must buy wool at that price where there is no bid or tender equal to or higher than that price for wool of a particular kind. As the full court observed in the New South Wales Farmers' Association case, the operation of the reserve price scheme can result in the Corporation borrowing very large sums of money. If the reserve price is above the market price, the Corporation may have to buy virutally all the wool that is offered for sale. Subject to certain conditions not presently relevant, the Minister may give directions in writing to the Corporation concerning the performance of its function and exercise of its powers: s.120(1). That power, however, arises only in "exceptional circumstances" and where the direction is necessary to ensure that the Corporation's performance of its functions or the exercise of its powers does not conflict with "major government policies": s.120(2)(a). The full court summarising the position, said (at 213):
"The Act is plainly designed to enable decisions

in the ordinary course to be determined by the
Corporation; but s.120 is a reserve power vested
in the Minister to be invoked where matters of
importance to the national interest are
involved. The fixing of minimum reserve prices
under s.66 is obviously of national significance
to a nation heavily dependent upon its exports
of primary products, including wool, which is
one of its principal exports, and as the
borrowings of the Corporation under the Act to
enable it to fulfil its statutory duties may be
in huge sums and could reach a total of A$4
billion during the forthcoming financial year.
The interests of the wool industry alone may not
always coincide with the national interests of
Australia as a whole."

6. It appears that the reserve price for wool had been in the order of 870 cents per kilogram for some time. Acting under the authority of s.120, the Minister directed that the reserve price drop to 700 cents per kilogram. It was very shortly after this direction that the Minister made his speech in Dubrovnik. According to counsel for Mr Kerin, the speech should be seen as a justification of the decision to lower the reserve price. In it, so counsel said, Mr Kerin "sought to allay fears" that the reserve price would go down further.

7. The speech comprises some thirteen pages and is too long to repeat in its totality. Much of the speech discusses the background behind the decision to lower the reserve price, namely, the prospect of a steadily rising wool stockpile. Mr Kerin summarised the position as follows:

"Having taking the strategic decision on the
minimum reserve price, the industry now has the
challenge of making it work, even though there
will be some short term costs. If there is one
central message I want to convey to you today,
it is the commitment of the Australian industry
and the Australian government to stand behind
the decision and to work to overcome the
problems we confront...
The Australian government's decision to lower
the floor price is immutable. The decision
brings the Australian minimum price back into
line with longer term trends and goes a long way
to restore the competitiveness of our product."

8. Later in the speech Mr Kerin referred to the government's decision to hold an open public enquiry into price policy for the wool industry. He continued in a passage of which the applicants complain:

"We need to satisfy ourselves that our wool
pricing and marketing system is appropriate to
the new world of the 1990s - a world of
fluctuating exchange rates and an increasing
globalization of international markets. Having
said that, let me make it quite clear that the
enquiry will not affect the reserve price. If
we are going to make changes, they will be much
further down the track. They will be made at a
time in the future when we would be considering
increasing the reserve price. They will not
result in its reduction.
I have a given a cast-iron guarantee, which I
repeat here, that the Australian government will
not contemplate, under any circumstances, any
further downward movement in the floor price.
We want to see stability and growth in the wool
market. The one-off decision made realigns the
price of our product to make it competitive.
Any speculation on a further price drop is
doomed to disappointment and would only be
counter-productive. The floor price, the MRP,
has been restored to its proper level and
purpose."

9. The statement of claim alleges that this speech was made after Mr Kerin had received representations from the applicants, among others, seeking his assurances that the reserve price would not be reduced. It is said, and for the purposes of the strike out application must be accepted, that Mr Kerin made the speech intending and/or well knowing that persons engaged in the international wool trade, including the applicants, would rely on it and would be induced to retain wool stockpiles and expend money on them by way of processing and otherwise.

10. Approximately eight months after the speech was given, the Wool Marketing Act was amended by the Wool Marketing (Temporary Provisions) Amendment Act 1991 assented to on 22 February 1991. The amending legislation, inter alia, inserted s.143 into the Wool Marketing Act effectively suspending the entire marketing scheme including the concept of a reserve price. The price of wool slumped. The result is alleged to be that the applicants suffered damage by the deterioration in value of wool, which it retained, it is alleged, acting on the faith of the speech and the representations in it, together with moneys which it expended on the wool between the date of the speech and February 1991. The estimated damages are particularised at $11,441,657.66.

11. The ground upon which it was said that the claim, based upon s.82 and s.52 of the Act, disclosed no reasonable course of action was that it would be a pre-requisite to a breach of s.52(1) that Mr Kerin, admitted for present purposes to have engaged in conduct which was misleading or deceptive in making the speech, gave the speech "in trade or commerce" being relevantly, in the circumstances of the present case, trade or commerce between Australia and places outside Australia. As Mr Kerin is not a corporation but an Australian citizen and a resident of Australia, s.52 of the Act is made applicable to him by the extended operation given to that section by s.5 and see too s.6(2)(h).

12. There was no dispute between the parties as to the principles to be applied in determining strike out applications such as the present. They are as set out in the judgment of the High Court in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-30 per Barwick C.J., viz that before a statement of claim will be struck out it must be clearly demonstrated that the applicants' case is so obviously untenable that it cannot possibly succeed. While the judgment of the Chief Justice (at 130) makes clear that argument even of an extensive kind may be necessary to determine whether the case has the degree of untenability suggested, nevertheless:

"(G)reat care must be exercised to ensure that
under the guise of achieving expeditious
finality a plaintiff is not improperly deprived
of his opportunity for the trial of his case by
the appointed tribunal."

13. Where the ultimate resolution of the question will depend upon disputed matters of fact, it will, of course, never be appropriate for a court to strike out the claim.
Was Mr Kerin's speech made in trade or commerce

14. Counsel for the applicants submitted this question could not be decided in the absence of additional facts said to be relevant. When pressed as to what additional facts could be relevant to the matter, counsel enumerated them and counsel for Mr Kerin then made admissions in respect of all of those matters of fact for the limited purpose only of the present proceedings. The admissions, as set out in written submissions in reply were in substance as follows:

1. The International Wool Textile Organisation was a body
concerned with the activities of persons buying and
selling wool on the international market and with
common policies of such persons.
2. The conference in Dubrovnik was a conference to
discuss and influence international wool prices.
3. Those participating included potential buyers and
sellers of Australian wool.
4. The nature of Mr Kerin's participation at the
conference and Mr Kerin's motivation in making the
speech was to influence wool prices in the interest of
Australian wool growers, the Corporation and Australia
and to persuade people not to dump wool but rather to
buy it and thus maintain high prices.
5. Mr Kerin came to attend at and participate in the
conference as a result of an invitation issued at his
request. (This admission was hardly necessary, for,
it being alleged in the applicants' pleadings, it must
be assumed for the purposes of the strike out
application).
6. That in speaking at the meeting Mr Kerin did so,
either in his personal capacity, or in his capacity as
Minister of Primary Industries and Energy.
7. That in making the speech, Mr Kerin was seeking to
encourage members of the international wool trading
community to buy Australian wool.

15. In oral submission Mr Kerin's counsel conceded that in making the speech Mr Kerin was also seeking to promote the interests of the Corporation.

16. Whether conduct is conduct in trade or commerce will often be a difficult question. However, the significance of the word "in" was authoritatively dealt with in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594. That case concerned the question whether a construction worker, who was injured in the course of his employment, had a claim against his employer on the basis that its foreman's statement that certain precautions had been taken was conduct in trade or commerce and, if untrue, gave rise to a breach of s.52. A majority of the court (Mason C.J., Deane, Dawson and Gaudron JJ.) rejected the view that s.52 should be read as only concerned with conduct towards consumers. A minority of the court (Brennan, Toohey and McHugh JJ.) were of the contrary view.

17. In the course of argument, two competing views of the ambit of the words "in trade or commerce" emerged. These two views were discussed in the joint judgment of the majority (at 602-3) as follows:

"The phrase `in trade or commerce' in s.52 has a
restrictive operation. It qualifies the
prohibition against engaging in conduct of the
specified kind. As a matter of language, a
prohibition against engaging in conduct `in
trade or commerce' can be construed as
encompassing conduct in the course of the myriad
of activities which are not, of their nature, of
a trading or commercial character but which are
undertaken in the course of, or as incidental
to, the carrying on of an overall trading or
commercial business. If the words `in trade or
commerce' in s.52 are construed in that sense,
the provisions of the section would extend, for
example, to a case where the misleading or
deceptive conduct was a failure by a driver to
give the correct handsignal when driving a truck
in the course of a corporation's haulage
business. It would also extend to a case, such
as the present, where the alleged misleading or
deceptive conduct consisted of the giving of
inaccurate information by one employee to
another in the course of carrying on the
building activities of a commercial builder.
Alternatively, the reference to conduct `in
trade or commerce' in s.52 can be construed as
referring only to conduct which is itself an
aspect or element of activities or transactions
which, of their nature, bear a trading or
commercial character. So construed, to borrow
and adapt words used by Dixon J in a different
context in Bank of NSW v The Commonwealth, the
words `in trade or commerce' refer to `the
central conception' of trade or commerce and not
to the `immense field of activities' in which
corporations may engage in the course of, or for
the purposes of, carrying on some overall
trading or commercial business."

18. After considering the context of the Act, the court indicated that the second meaning was to be preferred. The judgment continued (at 604):

"What the section is concerned with is the
conduct of a corporation toward persons, be they
consumers or not, with whom it (or those whose
interests it represents or is seeking to
promote) has or may have dealings in the course
of those activities or transactions which, of
their nature, bear a trading or commercial
character. Such conduct includes, of course,
promotional activities in relation to, or for
the purposes of, the supply of goods or services
to actual or potential consumers, be they
identified persons or merely an unidentifiable
section of the public."

19. The giving of a speech to an international wool conference by a Minister of State is not an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. A fortiori, if the Minister attends that conference in his personal capacity. It does not form part of the central conception of trade or commerce of which the majority of the High Court speaks, and is not made so merely because the speech concerns matters of trade or commerce. The giving of the speech is a matter that can be said to be in relation to trade or commerce, but not conduct which is actually in trade or commerce.

20. Counsel for the applicants submitted that the speech was conduct towards persons, namely the audience comprised of those whose business was the wool trade, made by the Minister, himself one of the three organs of the Australian wool marketing scheme or alternatively representing or seeking to promote the interests of the Corporation. It is true that the Minister has a statutory role to play in the marketing scheme of the kind already indicated, but that was not the role he was playing in attending the conference and delivering the speech. That is not a statutory function conferred upon the Minister under the Act. Nor, even conceding that the Minister was seeking to promote the interests of the Corporation and the industry generally, can he be said to have, in giving the speech, actually engaged in trade or commerce in so doing.

21. The applicants pointed to the decision of Morling J in Glorie v WA Chip and Pulp Co Pty Ltd [1981] FCA 224; (1981) 55 FLR 310 as lending support for its submissions. That case was concerned with a documentary film made by a consortium, consisting of a trade association and the Western Australian Forests Department, concerning forests and dealing with environmental matters. His Honour found the exhibition of the film to be conduct in trade or commerce. His Honour said of the involvement of the statutory body (at 320):

"The involvement of the Forests Department in
the production of the film did not make it any
the less a trade or commercial activity of the
association."

22. It is obvious that a statutory body could engage in trade or commerce. The treasury might mint coins to be marketed for collection; its sale of those coins would be conduct in trade or commerce. If the Treasurer, acting on behalf of his department, were to make a misleading statement in the course of promoting the sale of the coins, he could be representing the Treasury in its dealing with potential consumers. But such a case is remote from the present. The conduct complained of here is a speech of the Minister dealing with governmental policy which impinges directly upon the international trade in wool. It is not conduct which itself has a trading or commercial character, as the exhibiting of the film in Glorie clearly was.

23. I would, accordingly, strike out so much of the statement of claim as relates to a claim under the Act.
The claim in negligence

24. For Mr Kerin, it was submitted that a Minister of the Crown owes no duty of care in making a statement predicting government policy. Hence, it was said no action lay against Mr Kerin in the circumstances here pleaded. The submission, taken to its logical conclusion, was that a Minister could, free from the constraints of a civil suit, lie with impunity, notwithstanding that he was aware that in so doing listeners would rely on the truth of what he was saying, that he intended that they so do and as a result they suffered loss. Indeed, the submission would have it, a Minister might very well have an obligation to lie, as for example, when a decision had been made by the government that the currency be devalued and the Treasurer was asked what government policy was on such a matter.

25. The Minister's submission, if stated as a universal proposition, at the one time renders politicians immune from the civil liability that would attach to others in similar positions and renders them even more likely to be regarded with distrust by a community already cynical towards the conduct of its electoral leaders. If that be the law, I must apply it, but it augurs badly for the future of moral and political life in the community. However, I do not think that politicians are placed above the law as the submission would suggest.

26. It must be borne in mind that the present application is only a strike out application. For this purpose the facts as pleaded must be taken to be correct; that is to say that at the time of making the speech Mr Kerin intended and/or well knew or ought to have known that persons engaged in the international wool trade, including the applicants, would rely on the speech and would be induced by it to retain wool stock piles and expend money on them by way of processing or otherwise. It must also be accepted for present purposes that: (i) what was said to be represented by Mr Kerin was untrue or; (ii) that he did not have reasonable grounds for making the comments he did or; (iii) that he believed at that time that it was likely in the near future that the floor price indicator would be further reduced or the reserve price scheme abolished. Finally, it was accepted by all parties, for the purpose of arguing the present application, that the speech was a representation:

"(a) that the floor price indicator for
Australian wool would not be reduced below
700 cents per kg;
(b) that the next change in the said floor
price indicator would be an increase not a
decrease;
(c) that the reserve price scheme for
Australian wool would be maintained and
would not be abolished."

27. Obviously the matters of fact pleaded will be the subject of contest at a hearing and I make no comment about them. Also, there may well be debate as to whether the speech did, in its context, amount to the representations alleged. In particular, it may be argued not to be a prediction of future government action, but a statement of existing policy subject to change, having regard to the political and economic exigencies of the time. Before me, however, the parties argued the matter on the basis that the statement was properly to be seen as involving a prediction of future government action.

28. Counsel for Mr Kerin sought to found his submission upon four lines of authority which, it was said, cumulatively resulted in the conclusion that an action of the present kind was incompetent.

29. First, reliance was placed on the principle that a government promise which has the effect of fettering future executive action is void. As a general proposition this may be accepted: Watsons Bay and South Shore Ferry Co Ltd v Whitfeld [1919] HCA 69; (1919) 27 CLR 268 at 277; The Amphitrite (1921) 3 KB 500; William Cory and Son Ltd v London Corporation (1951) 2 KB 476; Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth [1977] HCA 71; (1977) 139 CLR 54 at 61, 62, 71, 86 and 113, and Attorney-General v Quin (1990) 170 CLR 1 at 17, 18. It may be noted, however, that if the government purported to bind itself it does not follow from these cases that its acts would be without legal consequences, raising, for example, an estoppel, as the judgment of Mason C.J. in Quin (at 18) suggests.

30. The second principle was said to be that conduct which might, if engaged in by a private citizen, constitute actionable misrepresentation, will not be construed as constituting such a representation where it relates to the exercise of statutory powers in the future. This rather broad brush principle was said to emerge as a general proposition from the decision of the High Court in San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [1986] HCA 68; (1986) 162 CLR 340. A perusal of the joint judgment of Gibbs C.J., Mason, Wilson and Dawson JJ. reveals no such statement of principle. The ratio of the case appears at 358, where their Honours conclude that for the appellants to succeed in their claim they would need to establish that the alleged representation was made and that it was made with the intention of inducing members of the class of developers to act in reliance on the representation. As the appellants failed to establish that the representation was made, their case failed.

31. In San Sebastian, the appellants had submitted that a duty of care would arise in two relevant circumstances. The first was where `A' engaged in conduct intended to cause `B', or a class of persons, to act in a particular manner and `B', or a member of that class, is induced to so act. The second was where `A' has an interest in inducing such action. The majority, discussing the alternative argument, said:

"The appellants' alternative proposition derives
from the American Restatement of the Law of
Torts (2d), para 552, which speaks of the
liability of a person who, in the course of his
business, profession or employment, or in any
other transaction in which he has a pecuniary
interest, supplies false information for the
guidance of others in their business
transactions, for pecuniary loss caused to them
by their justifiable reliance on the
information, if he fails to exercise reasonable
care or competence in obtaining or communicating
the information. Whether this principle of
liability extends to liability on the part of
statutory and local authorities in respect of
negligent misstatements made in development
plans was not made clear by the argument. In
Australia the general interest which a local
authority has in promoting or encouraging the
development of its area would not ordinarily be
classified as a `pecuniary interest'. We do not
consider that a general interest of this kind is
enough to support the existence of a duty of
care on the part of an authority in relation to
statements made in development plans so as to
make the authority liable for negligent
misstatement in accordance with the appellants'
alternative proposition."

32. While, therefore, the court left open the question of whether the mere supply of false information by a statutory authority may be actionable, absent a pecuniary interest in the ordinary sense, the court clearly enough was of the view that an action would have lain against the respondents had there existed a misrepresentation made with the intention of inducing the appellant, or members of a class to which the appellant belonged, to act in reliance on the representation. The case does not support the proposition for which it was cited.

33. The third foundation of the submissions for Mr Kerin was the proposition that representations as to future executive action made by a candidate for election to parliamentary office are not actionable. For this proposition the case of Durant v Greiner (1990) 21 NSWLR 119 was cited. It does not stand for that proposition. The case, brought under the provisions of the Fair Trading Act 1987 (NSW), alleged misleading or deceptive conduct of a politician in making a statement during a by-election campaign concerning the closure of schools. That statement was held to be a statement by Mr Greiner of the position being taken by him and the political party he led as at the date the statement was made. In fact, on that day it was established that there was no proposal to close down a particular school relevant to the case. Rolfe J said (at 130):

"To succeed on this submission it would be
necessary, in my view, for the plaintiffs to be
able to satisfy the Court that the statement
made by the first defendant on 21 September 1988
was a statement that at no time in the future
and in no circumstances in the future would
Milsons Point Public School be closed. I do not
consider that the statement can be given that
effect."

34. This passage, on which the submission was founded, is no more than a comment on the meaning of the particular statement made by Mr Greiner. It is not a statement of any general principle. No doubt a court would be careful to construe a statement by a politician to avoid the conclusion that it carried an implication that government policy would never change, but that is a far cry from the submission sought to be made.

35. The final submission was that the negligent exercise of statutory powers is not actionable. For this submission the decision of the Privy Council in Rowling v Takaro Properties Ltd [1987] UKPC 2; (1988) 1 AC 473 was cited. That case concerned an application against the New Zealand Minister of Finance, alleging that in refusing an application for Reserve Bank approval for an injection of capital into a New Zealand company by a Japanese resident the Minister had acted negligently, both in misconstruing the law and by "negligently" failing to take legal advice on the question of construction of the relevant statute, with the result that the plaintiff company had suffered loss. The Board found it unnecessary to decide whether the Minister owed a duty of care to the plaintiff because, on the facts, no breach of any such duty had been established. It is difficult to see the case as supporting the principle for which it was cited. Indeed, it has, as the applicants submit, long been established that an officer of State is not immune from suit for unlawful acts, even where the Crown itself would be entitled to immunity: Feather v The Queen (1865) 6 B and S 257 at 296; [1865] EngR 205; 122 ER 1191 at 1205.

36. If there does exist the principle for which counsel for Mr Kerin submits, that principle would need to be founded in public policy, rather than in the cases to which reference has been made. One element of policy which would be required to be taken into account is that to defend a suit based on negligence in relation to prediction of government policy, the Minister may need to rely upon what has taken place in the cabinet room, in breach of cabinet confidentiality. That possibility would need to be weighed against the public interest in ensuring that politicians do not make negligent representations to those whom they know or ought to know would rely upon such statements. The cases of Sankey v Whitlam [1978] HCA 43; (1978) 142 CLR 1 in the High Court and Commonwealth v Northern Land Council (1991) 30 FCR 1, show that there is no absolute privilege against disclosure of cabinet communications, although it will be necessary to balance the public interest against production, having regard to the desirability of maintaining the convention of collective responsibility, with the public interest in the administration of justice. Matters relevant to that balancing process are discussed in the Northern Land Council case (at 38). The procedure there suggested, of allowing confidential inspection by counsel to determine whether a general disclosure is necessary, may be expected to alleviate, to a considerable degree, any procedural hardship which might otherwise be thought to attend a Minister of the Crown who, to prove government policy, might need recourse to cabinet memoranda.

37. So far as the researches of counsel have disclosed the question has arisen directly only once, in New Zealand, in Meates v Attorney-General (1983) NZLR 308, a decision of the New Zealand Court of Appeal. In that case the plaintiffs, shareholders in a failed company, claimed damages in negligence against the government of New Zealand, alleging that they had been induced by negligent statements or advice from the Prime Minister to establish the company to assist that Government with its regional assistance plan and that the Minister of Trade and Industry had assured the plaintiffs, when the company was in financial difficulty and they had agreed to the appointment of a receiver on that basis, that their interests would be safeguarded and that they would be indemnified. In reliance upon these representations, which proved to be false, the plaintiffs had not taken normal commercial steps to safeguard their position and, in the result, the shares in the company became worthless.

38. At first instance the New Zealand Chief Justice had dismissed the claim on the ground, inter alia, that the Government did not owe any duty of care to the shareholders in making the statements or giving the assurances. In so doing his Honour confined the cause of action for negligent advice to advisers who carry on the business or profession of giving advice and so do in the course of that business, subject to the irrelevant exception of an adviser who had a financial interest in a transaction upon which he gives advice. The majority of the Court of Appeal (Woodhouse P and Ongley J) were of the view that this was too narrow an approach to the law of negligence and, in this respect, followed what Stephen J had said in L Shaddock and Associates Pty Ltd v Parramatta City Council (No. 1) [1981] HCA 59; (1981) 150 CLR 225 at 240-241.

39. The majority also followed the statement of principle of Lord Wilberforce in Anns v Merton London Borough Council [1977] UKHL 4; (1978) AC 728 at 751-2, that the correct question to ask was whether there was, prima facie, a sufficient relationship of proximity or neighbourhood which indicated the presence of a duty of care, but subject to any considerations which might limit that duty of care. It was found that a duty of care existed and that, although the representations went to matters of future action, they were provided by someone who intended them to be acted upon and were thus actionable.

40. Cooke J dissented in the result, finding that there was no breach of a duty of care. His Honour was nevertheless of the view that there were no doctrinal reasons why Ministers of the Crown were automatically exempt from assuming a duty of care and expressed the scope of the duty, arising in the circumstances of that case, as being to take reasonable care, both in what was said and done, to safeguard the interests of the shareholders (at 379).

41. Meates is not binding upon me. It is, however, a decision of the Court of Appeal of New Zealand applying the common law and entitled to respect. It illustrates that the issue is clearly arguable which, unless the present application is to be treated as being in the nature of a demurrer, is one answer to the strike out application before me. Later authorities in the High Court which have explored the boundaries of the law of negligence have not cast any doubt upon the reasoning of Meates so far as it held that a duty of care could exist in a circumstance where a government minister made a statement about future policy. Indeed, the joint judgment of Gibbs C.J., Mason, Wilson and Dawson JJ. in San Sebastian v The Minister [1986] HCA 68; (1986) 162 CLR 340 at 354-5, makes it clear that the treatment of the duty of care in the context of misstatements is but an application of general principle to which the relationship of proximity is integral. There is no reason to assume that in other areas the government or its minister remains immune from judicial action.

42. I am accordingly of the view that the paragraphs in the statement of claim alleging a cause of action in negligence against Mr Kerin should not be struck out and that the matter should proceed to trial on this question. As there were other matters in the statement of claim to which counsel for Mr Kerin took exception, which were not argued before me, and in respect of which it was expected that agreement could be reached, I shall stand the matter over to a date to be fixed when an order can be made relating to all matters in the statement of claim, or the outstanding matters can then be litigated. I direct counsel for the applicant in the proceedings to bring in short minutes of order on that date to reflect the matters dealt with in this judgment and, if there has been agreement, the matters upon which agreement has been reached.